They don't need a whole heap really. For the first 12 weeks, they pretty much eat, sleep and poop! Oh, and cry ;-)
Essentials:
Vests
Sleepsuits
a cardigan
a baby hat
Muslin cloths
Nappies (don't pre buy heaps as you may want to try different brands, sizes etc)
Wet wipes or reusable cloths (likewise, you might hate a certain brand, so buy a variety to try)
Somewhere to sleep - moses basket, crib, next to me, cot - whatever works for you. You can buy that second hand if you want, but always buy a new mattress
waterproof cover for the mattress and cotton sheets
Car seat and pushchair - totally depends on what you want, but we bought a fairly cheap travel system and they get used and abused, thrown in the back of the car. It's still working just fine for baby 2. (We spent the money we saved on a big 3 wheel running/off road buggy, as suited our lifestyle :) )
Blankets or sleeping bags. Personally I love sleeping bags - super easy
If breastfeeding - nipple cream and breast pads. You may want to buy a breast pump, bottles etc down the line, but I would wait until baby arrived to find out how you get on with feeding.
(I've breastfed, so can't help much with formula feeding must haves!)
Nice to have:
somewhere for them to sleep downstairs - we use a 3-in-1 rocker napper, which lays flat to be a bed, but can also sit up as a chair
Rocker/bouncer - once they get to around 8 weeks, they start to let you put them down... and it's nice to have somewhere to put them
Play gym - same as above
I don't think they interact with many other toys under 12 weeks - the world is enough for them.
Nappy cream - there are two types - most are barrier creams and are good at preventing nappy rash, but really, you don't need to put that on if baby's bum is fine. Then yellow metanium is the only thing I've found that clears up nappy rash.
Snot sucker - disgusting, but so good for clearing the snot. (And strangely satisfying ;-) )
I didn't buy any outfits in 0-3, mine just lived in sleepsuits as they look cute and are a lot less faff. Socks on small babies is the bane of your life!!